Strong regulatory environment and stronger US dollar offers best opportunity for NRIs to invest in Indian real estate now
Dr Niranjan Hiranandani, the patriarch of Indian real estate, offers insights into Indian real estate and urges NRIs to invest in the Indian real estate that is now transparent and offers better value per AED or US$ spent
Date: Dubai, September 29, 2018
Investment by expatriate Indians in Indian property doubles, from $5 billion in 2014 to $10.2 billion in 2018
Indian real estate market expected to touch $180 billion by 2020
New housing launches across top seven cities in India increased 27% y-o-y in January-March 2018
Housing expected to contribute around 11 per cent to India’s GDP by 2020
Rise in real estate deals through 2018 driven by policy changes and enhanced transparency
Private equity investments in Indian real estate increased 15 per cent year-on-year in January-March 2018 to Rs16,530 crore (US$2.56 billion)
Private equity investments in Indian real estate are estimated to grow to US$100 billion by 2026
India’s construction sector received Foreign Direct Investment (FDI) equity inflows to the tune of US$24.67 billion in the period April 2000-December 2017
Sound regulatory environment, increased transparency and accountability as well as the establishment of escrow accounts under the Real Estate (Regulation and Development) Act (RERA), coupled with a favourabe exchange rate for Non-Resident Indians (NRIs) make investment in Indian real estate a lucrative options against other asset classes, according to Dr Niranjan Hiranandani, President of the National Real Estate Development Council (NAREDCO), which works under the aegis of Ministry of Housing and Urban Affairs, Government of India.
“New housing launches across top seven cities in India have increased 27 per cent year-on-year in January-March 2018,” Dr. Niranjan Hiranandani, who is also the Co-Founder and Managing Director of Hiranandani Group, told the GCC media at a press briefing in Dubai.
“The Indian Government has launched various initiatives, including ‘101 Smart Cities’ as also ‘Housing for All by 2022’, which have led to positive results. Similarly, the focus on affordable housing as a segment which has been given infrastructure status as also other benefits including taxation benefits and subvention schemes has resulted in this segment getting a boost. It all leads to a positive situation, which is apt for expatriate Indians to invest in.”
Buying a ‘home, back home’ is a matter of sentiment; but Investments by expatriate Indians in Indian real estate have steadily grown over the past few years. Recent media reports mention investments by expatriate Indians in Indian real estate having doubled from US$5 billion in 2014 to US$10.2 billion in 2018.
To a large extent, this follows the new regulatory regime which has made Indian real estate more transparent and increased the Indian real estate developers’ accountability in terms of possession deadlines and quality of construction. The recent global currency value fluctuations have made it a sweeter deal for the expatriate Indians, whose purchasing power vis-à-vis the Indian rupee has gone up.
Growth in the Indian real estate market is being driven by the fast rate at which urbanization is happening. A recent survey mentioned India’s urban population as expected to reach 800 million in the next 30 to 35 years, becoming equal in size to India’s rural population. “Given this, it has become imperative for the Indian Housing Industry to accentuate and rise to the occasion and match the demand,” said Dr. Hiranandani.
Hiranandani Group, which is among the leading luxury real estate developers in India. Based in Mumbai, the Hiranandani Group and its affiliated companies have on-going projects in Mumbai, Thane, Panvel and Chennai, where expatriate Indians have traditionally bought 12 to 18 per cent of the total off-take in their projects across the past few years.
Dr. Niranjan Hiranandani has been at the forefront of industry-government discussions on enhancing the positives which would boost further growth in Indian real estate.
He said that most of this demand is expected to be in the affordable housing segment and the middle income group. From the perspective of GDP growth, the forward and backward linkages mean Indian real estate will also create more employment opportunities.
“The Indian real estate market is expected to touch US$180 billion by 2020. Housing sector is expected to contribute around 11 per cent to India’s GDP by 2020,” added Dr. Niranjan Hiranandani. For the expatriate Indian, it is a situation where the advantages just keep adding up: it begins with the recent reduction in value of the Indian rupee – which makes Indian real estate more affordable, new regulatory regime including RERA, which have led to increased transparency, as also growing focus by Indian real estate developers on the expatriate market.
The present Indian Government has set high standards of execution of policies and plans by bringing in reforms for real estate sector and also by promoting ease of doing business. With the introduction of RERA, a positive approach towards home buying is evident. India’s Real Estate has evolved into a consumer friendly industry, in terms of transparency from the builders’ side to expatriate Indians easily getting home loans from financial institutions.
“NAREDCO has been working in sync with the Indian Government on various aspects which would provide the much needed impetus and fillip for enhancing growth in real estate,” he added.
India has worked hard to earn the status of being one of the fastest developing countries, and if the GDP keeps growing at the same rate as now, by 2050 India will be on course to becoming among the most powerful economies, globally. Given these positive developments, the role of real estate continues to be significant; and it is expected to be among the chief drivers of India’s economic growth, said Dr. Niranjan Hiranandani.
The positive investor sentiment which has been observed among expatriate Indians leads one to conclude that expatriate Indians and foreign consortia are looking for opportunities to invest in Indian real estate including commercial spaces. The drop in the value of the rupee will have a positive impact in terms of enhanced purchases by expatriate Indians, which is sort of a windfall gain.
“As overseas investor sentiment turns ‘sunnier’, the expatriate Indian will be able to buy property by paying fewer dollars now. Hopefully, in the new regulatory regime, this trend will continue – not just in 2018, but also in the future,” concludes Dr. Niranjan Hiranandani.
Picture Caption: Dr. Niranjan Hiranandani is Founder and MD, Hiranandani Group, his recent initiative is Hiranandani Communities. He is the President, National Real Estate Development Council (NAREDCO), which works under the aegis of Ministry of Housing and Urban Affairs, Government of India.
Profile of Dr Niranjan Hiranandani, National President, NAREDCO
Indian real estate has undergone a paradigm change with the Real Estate (Regulation and Development) Act, 2016 (RERA) and the Goods and Services Tax (GST) redefining the way real estate functions, and Dr. Niranjan Hiranandani, the National President of The National Real Estate Development Council (NAREDCO), has played to perfection the role of a ‘father figure’, one who has helped real estate developers to understand and redefine the new paradigm – of working in the new regulatory era.
NAREDCO, as a body of stake holders in Indian real estate, strives to be the collective force influencing and shaping the real estate industry. Dr Niranjan Hiranandani has put in efforts to ensure it remains the leading advocate of developing standards for efficient, effective, and ethical real estate business practices, valued by all stakeholders of Indian real estate and viewed by them as crucial to their success. As National President, NAREDCO, Dr Niranjan Hiranandani is ensuring that the organization works to create and sustain an environment conducive to the growth of real estate industry in India through the public-private partnership route, so that industry and government partner through advisory and consultative processes.
A business leader from whom fellow real estate developers seek advice, Dr Niranjan Hiranandani’s profile is defined across a combination of qualities which include sharp professional business acumen. An upfront citizen with social awareness as also an Industry leader who keeps up with latest in the business world, under his guidance, Brand Hiranandani has become synonymous with Quality, Timely Completion of Projects and Holistic Development, and on a similar thought process, Dr Niranjan Hiranandani brings in these qualities to all his endeavours – the National President, NAREDCO included.
Dr. Niranjan Hiranandani has held senior positions in various industry bodies – he has been President, Maharashtra Chamber of Housing Industry (MCHI); Chairman – Real Estate & Infrastructure Committee & Past President of Indian Merchants Chamber (IMC); Advisor of the Real Estate Committee of Federation of Indian Chambers of Commerce and Industry (FICCI); Former Chairman of Advisory Council of Confederation of Real Estate Developers’ Association of India (CREDAI). He has also been Member of the Task Force for reforms in Housing and Urban Development of Government of India; as also Member of the Study Group on Slum Rehabilitation Scheme, Government of Maharashtra. He has been Convener of the Key Group representing Business Community in the United Nations Conference on Human Settlements (HABITAT II) as also Member of the Working Group on Urban Housing for the Ninth Five Year Plan.
Completing his schooling from Campion School, Mumbai and graduating with a Bachelor of Commerce Degree (Hons.) with a distinction of standing Second from Mumbai University, Dr. Niranjan Hiranandani did his F.C.A. from the Institute of Chartered Accountants of India.
Starting his career with teaching of chartered accountancy, he entered into the business world by venturing into textiles in the late seventies, and in 1981, he set up his own weaving unit at Charkop in Kandivali, Mumbai; and then he forayed into real estate business. Though, according to him, real estate at that time was considered as a ‘dirty industry’ and people associated with it were treated as ‘corrupt’, which made it a really a big risk to venture into, but he didn’t lose heart and kept working hard and finally with his consistent efforts he got first spark of recognition in the construction line with his work in Versova, Andheri in the mid-eighties.
The next big break came when he got an opportunity to develop a large township at Powai, Mumbai with modern Infrastructure of concrete roads, regular water supply, recycled sewerage water plant, electric & high tech communication networks as well as top-of-the-line commercial, residential, and educational facilities – Hiranandani Gardens, Powai. Since then, the Group has come up a long way to be recognized countrywide for its modern and state-of-the-art mix-user township projects, including in Thane, Panvel and Chennai.
He is known as ‘Builder Extraordinaire’ and as the man responsible for changing the skyline of Mumbai. He has also been involved with academics, as the Trustee and Immediate Past President of the Hyderabad (Sind) National Collegiate (HSNC) Board.
Dr Niranjan Hiranandani, the son of a Padmabhushan honored ENT specialist Dr. L H Hiranandani, is married and blessed with a son and a daughter. He holds key positions in various government bodies, private and social institutions, schools and colleges. Besides these, he runs 17 colleges, 2 hospitals, among other organizations. He believes that “With sincerity and commitment to calls with consistent effort one can achieve immense success and great height.”
Leadership, brilliance, untiring zest for excellence and down-to-earth are words that come to mind when one comes face-to-face with Niranjan Hiranandani. His catchphrase in life, ‘labore et constantia’ (with consistent efforts, one can scale great heights) sums up his success story.
By his own account, he wants to work towards ensuring that the real estate industry can hold its head high, and proclaim that ‘we are the builders of this nation”.
Hiranandani Group : Focused on the Larger Goal – Happiness of People
The community is our reason of existence, and its happiness is our motivation. Ever since its inception in 1978, Hiranandani Group has focused on the simple fact that its success comes from its people. Wherever there are people, there is an opportunity to serve. Every activity, be it in real estate, education, healthcare, hospitality, leisure or entertainment has steadily focused on creating a better experience in every aspect of life. While the corporate entity has grown from strength to strength, the Group is primarily synonymous with quality, commitment towards customers, reliability, and excellence in architecture.
Raising Global Lifestyles: Hiranandani Group has continually pioneered newer technologies, bold design and precision engineering to create landmark residential townships and commercial complexes. Propelled by the drive to change expectations and the lifestyle of people thus changing the skyline of the city, Hiranandani Group has ushered in an era marked by higher standards of living and global lifestyles.
With its far sightedness to spot the shifting societal trends, Hiranandani Group is today a leading real estate group in its flagship business of construction with a pan – India as well as international presence.
The Group is known for its projects of Hiranandani Gardens, Powai, Hiranandani Meadows, Thane, Hiranandani Estate, Thane as also Hiranandani Business Parks in Powai and Thane.
HIRANANDANI COMMUNITIES: A SHORT INTRODUCTION
Going beyond just square feet of constructed space, real estate development should ideally be about the community, which is made up of residents and the activities that bring them together. For Niranjan Hiranandani, the leading Indian real estate developer, ‘community living’ is when a resident does not just live in the township, but shares – and enjoys – the positives of the project, the location as well as the social infrastructure along with neighbours.
More than 25 years ago, it was a dream to create India’s finest real estate development. To create not just spaces where people live, but a something which would provide for its residents, a life that was more than ‘just living’.
Across twenty five-plus years, this model of eco-friendly, green and sustainable integrated township, where ‘walk to work and walk back home’ turned into reality, became a land-mark – which set the industry bench-mark. For Indian real estate, this model is associated with Niranjan Hiranandani, the MD of the Hiranandani Group.
As the Hiranandani Group completed 25 years, it was time for a new initiative by Niranjan Hiranandani: Hiranandani Communities.
A new corporate entity which will create modern marvels for a resurgent India – Hiranandani Communities will create real estate that seamlessly blends ethos that are local, while ensuring technical excellence that is global. Driven, resourceful and innovative, Hiranandani Communities reflects the core values of Niranjan Hiranandani, and it aims to be the force that will help fuel India’s economic growth. It aims at providing housing to the people, delivering state-of-the-art, environment friendly and futuristic real estate, including integrated townships, which will showcase India’s progress in real estate.
Hiranandani Communities has its path well defined: offering world-class, environment friendly, safe and secure, socially responsible, eco-friendly and sustainable real estate that will enrich the lives of those who work and live in those communities. With projects in Panvel, Ahmedabad and Chennai, Hiranandani Communities will build on the success of Hiranandani Gardens, Powai; as also Hiranandani Meadows and Hiranandani Estate in Thane, as it grows over locations across India’s ‘smart’ growth centers.
National Real Estate Development Council (NAREDCO), which works under the aegis of Ministry of Housing & Urban Affairs, Government of India, was established as an autonomous self-regulatory body in 1998 under the aegis of Ministry of Housing and Urban Affairs, Government of India. It was in this year that the Government of India redrafted the National Housing & Habitat Policy, giving due importance to the Housing and Real Estate sector, declaring the goal of ‘housing for all citizens’.
The Indian housing and real estate sectors and the allied industries welcomed the establishment of NAREDCO as the apex national body for the real estate industry. It was visualized as a single platform where Government, industry and public would discuss various problems and opportunities face to face which would result in speedy resolution of issues. It was formed with the mandate to induce transparency and ethics in real estate business and transform the unorganized Indian real estate sector into a matured and globally competitive business sector.
NAREDCO in its untiring efforts to serve the real estate sector through representations, meetings, events, media interactions, etc., on sector-specific issues and challenges, has been pro-actively involved with and has also positioned itself to partner with the Government of India, with the aim to infuse transparency and build trustworthiness with respect to all stakeholders of housing and real estate.
The Minister of Housing and Urban Affairs, Govt. of India, is Ex-officio Chief Patron of the Council. Hon’ble Minister of State for Housing and Urban Affairs, GoI, Shri Hardeep Singh Puri is the Chief Patron of NAREDCO National.
Day-to-Day affairs of the council are managed by a Governing Council (GC) comprising members elected from various categories of memberships, six members nominated by the Chief Patron from ministries and PSUs including one person of eminence from industry, three honorary members from chambers of Commerce, CIDC and NAR, one member from each State REDCO / NAREDCO State Branch and Director General appointed by GC. Chairman, President, Vice Presidents and Member Finance are elected from amongst the members of the Governing Council for a tenure of two years. President is head of the Council and Director General is the Chief Executive of the Council. One third of elected members retire every year and fresh elections held before the AGM every year.
The Council also has a Chairman, nominated by Central Government or the Governing Council, who presides Executive Committee comprising Chairman, President, Vice Presidents, Member Finance and Director General. Executive Committee oversee affairs of NAREDCO at National, Regional and State levels. Presently Shri Rajeev Talwar, CEO, DLF Ltd. is the Chairman of the Council.
The Council also has a high level Advisory Council, comprising past Chairmen / Presidents and eminent personalities from public and private sectors, which advises Governing Council on various functional and policy issues related to real estate sector.
Hon’ble Minister of State for Housing and Urban Affairs, GoI, Shri Hardeep Singh Puri, who also is the Chief Patron of NAREDCO National, has echoed the role of NAREDCO in promoting ethical business practices and the determination of the members to support the Government in achieving the Mission of Housing for All by 2022, set by the Hon’ble Prime Minister.
Various recent reforms announced by the Government and the continued willingness to engage with industry stakeholders in order to eliminate unscrupulous business models has been the priority of this Government, to which NAREDCO has responded positively.